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Sunday, November 24, 2013

The Fresh Market (TFM) plummets after reporting earnings on 21 Nov 2013

According to The Wall Street Journal there are three secondary offerings on tap for next week, but no IPOs. The largest of these, Sprouts Farmers Markets Inc. (NASDAQ: SFM), was supposed to price on Thursday, but that was delayed until Monday likely due to the weak earnings report from The Fresh Market Inc. (NASDAQ: TFM) earlier last week. Sprouts is planning to sell 25.9 million shares. Shares closed at $37.86 on Friday, which would indicate a capital raise of around $975 million.

Shares of specialty food retailer The Fresh Market (TFM) are sinking after the company’s third quarter results and full year guidance fell short of analysts’ consensus estimates.
Last night, The Fresh Market reported Q3 earnings per share of 23c and revenue of $364.5M. Analysts' expectations were for EPS of 26c and revenue of $378.57M. The company reported an increase in same store sales of 3.1%.

WHAT'S NOTABLE: The Fresh Market said it expects FY13 EPS of $1.42-$1.47, compared to the consensus estimate of $1.53. It also forecast FY13 same store sales up 3%-3.5%.
ANALYST REACTION: This morning, research firm Sterne Agee downgraded The Fresh Market to Neutral from Buy following the company's Q3 miss and weak guidance. The firm cited increasing competition and growing pains outside the company’s core market.
PRICE ACTION: In morning trading, The Fresh Market fell more than 19% to $40.80 on more than eight times its average daily trading volume. Year to date, the stock is down almost 15%.

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